Case Study 4

A manufacturer was able to realise £600,000 for obsolete parts when a production line reached end of product life. Through complete visibility of MRO inventory relating to these assets, the Company was able to sell 87% of spares that would otherwise have become obsolete.

 __________________________________________________________________________

 __________________________________________________________________________

A global manufacturer of high volume consumer goods was planning the introduction of a new line.  A key part of this was the closure of manufacturing a product that was approaching end of life in order to locate the new facility.

As part of the decommissioning strategy, the Company was seeking to realise cash from the sale of soon to be redundant machinery and associated spares.

The Company had benefitted from Propeller’s Pro-Pod radio frequency identification system, which controlled its Maintenance stores.  In addition to automatically controlling the movement of stock from the storeroom, the system captured information relating to where spares were used within the plant – down to asset level.

Usage reports were generated six months in advance of planned line closure which detailed potential spares obsolescence.  Having the ability to quickly identify asset specific spares, the Company was able to forecast its potential obsolescence liability.

With the assistance of Propeller, a disposition strategy was implemented with identified stock sold over the last few months of line life.

The outcomes of the project included:

 • Advanced notification of potential obsolescence;

 • Dramatically reduced stock holding liability;

 __________________________________________________________________________

The Bottom Line

The Company was able to realise £600,000 for obsolete inventory.

If you’re interested in achieving similar results in your company, please contact us to set up a complimentary telephone conversation.